NEW YORK -- Monsanto Company's seeds and traits strategy is the fundamental driver to the company's future growth and fiscal 2012 financial goals.

Between now and fiscal 2012, Monsanto expects the gross profit of its Seeds & Genomics segment to grow by more than 60 percent. This is the message Carl Casale, Monsanto's executive vice president, will tell investors today as part of a presentation at the Morgan Stanley Global Basic Materials Conference in New York.

For fiscal 2009, Monsanto expects to achieve 20-percent-plus ongoing earnings growth and generate more than $1.8 billion in free cash. Casale will reconfirm Monsanto's objective to deliver on-going earnings per share (EPS) in fiscal 2009 of $4.40 to $4.50, compared with $3.64 per share in fiscal 2008. This includes expectations for EPS growth in the second and third quarters to both be in the 10-to-12 percent range compared with the same periods in fiscal 2008.

The company's Seeds & Genomics segment additionally expects to maintain an approximately 18 percent compound annual growth rate in its gross profit through fiscal 2012. This growth is expected to come as the company manages the anticipated decline in gross profit from its Roundup and other glyphosate herbicides business, which is projected to peak in fiscal 2009 at an expected $2.4 billion to $2.5 billion gross profit range and settle to roughly $1.9 billion in gross profit in fiscal 2012.

Monsanto's consistent investment in research in the 9-to-10 percent range of net sales has maximized returns. Most of that R&D investment is for breeding and biotechnology to support the company's seeds and traits business, which has grown at a compound annual growth rate of 28 percent on a gross profit basis from 2001 through 2008.

"Our investment in R&D has been focused on opportunities that create new value for farmers globally," Casale will say. "We leverage R&D as a springboard that accelerates success and drives future growth with commercial products that solve farmers' most pressing needs to reduce crop stress and enhance yields."

Two such technologies on the verge of commercialization are SmartStax(TM) corn and Roundup Ready 2 Yield(TM) soybeans.
Casale will discuss how SmartStax will raise the bar as the most durable and complete on-farm package for weed and pest management, and will become the platform for all of the company's future corn technologies. SmartStax is designed to deliver a higher-yielding package by combining a broader spectrum for herbicide tolerance and insect control with the potential for reduced refuge requirements.

Currently, corn growers are required to plant structured refuges or plots of corn that do not use in-plant protection technology near corn acres that do. The percentage of refuge acres varies based on the specific geography, but in general has been set at 50 percent in cotton-growing regions of the United States and 20 percent in the northern Corn Belt. Monsanto submitted a request to the EPA in June 2008 to reduce refuge requirements for SmartStax to 20 percent in cotton-growing states and 5 percent in the northern Corn Belt.

In addition to SmartStax, Monsanto has successfully moved another technology platform -- Roundup Ready 2 Yield soybeans -- into the early commercial stages, marking the start of a new era in soybean production.

Like SmartStax, Roundup Ready 2 Yield will be the trait platform for future soybean technologies such as higher-yielding soybeans, which are demonstrating yield improvements of more than 7 percent on top of the 7 to 11 percent yield boost that Roundup Ready 2 Yield soybeans will provide over comparable Roundup Ready soybeans.

Earlier this month, Monsanto delivered the first bag of Roundup Ready 2 Yield soybeans to a farmer in northern Illinois. The demand for this new technology is expected to help boost soybean seeds and traits gross profit by approximately 70 percent between fiscal 2009 and fiscal 2012.

Casale will highlight that Monsanto is poised to launch several industry- leading technologies between fiscal 2012 and the end of the decade. Two products -- second-generation drought-tolerant corn and higher-yielding soybeans -- have joined nitrogen-use-efficiency corn and first-generation drought-tolerant corn as game-changing technologies under development.

Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. Monsanto remains focused on enabling both small-holder and large- scale farmers to produce more from their land while conserving more of our world's natural resources such as water and energy.

SOURCE: Monsanto Company via PR Newswire.